IMF forecasts Romania recession in 2026 with higher inflation and unemployment

Growth forecast cut to recession

The International Monetary Fund published its World Economic Outlook on Tuesday, 13 October 2026, and cut its 2026 growth forecast for Romania to a 0.5% contraction. The April forecast had projected growth of 0.7%, and the forecast made in October 2025 was 1.4%. For 2027 the fund lowered its projection to 2.2% from 2.5% in the spring. Romania and Ireland, which is forecast to shrink by 1%, are the only countries in Europe, advanced or emerging, expected to contract this year. The revision follows a recent cut to Romania's forecast by the World Bank, which the articles describe as pointing in the same direction.

The fall meetings of the IMF and World Bank are taking place in Bangkok, Thailand, in the week of 13 October 2026, where the forecasts were presented.

Inflation and the budget

The fund now expects average inflation of 8.2% in 2026, up from the 7.8% it forecast in April, and 4.1% in 2027, against 3.9% in spring. The revision adds pressure on this year's budget and makes a 2027 budget harder to draft. Among neighbours, Bulgaria is forecast at 4.9%, Lithuania at 5.4%, Poland at 3.2% and Hungary at 1.9%. Only Turkey, Ukraine and Moldova are forecast to have higher inflation, which leaves Romania with the highest inflation in the EU for 2026.

Unemployment and the external deficit

The IMF expects the unemployment rate to rise to 6.5% in 2026, from 6.1% in 2025 and above the 6% it forecast in April, before easing to 5.9% in 2027. The current account deficit is seen at 7% of GDP in 2026, up from 6.8% in spring, and falling to 6.7% in 2027, a smaller improvement than the 6.2% projected in April. In the same report, unemployment is 4.5% in Hungary, 3.2% in Poland and 3.0% in Czechia. On the external balance, Bulgaria (minus 8.0%) and Cyprus (minus 7.7%) have larger deficits in 2026, while Poland is at minus 1.9% and Hungary at minus 0.5%.

Regional growth and the global backdrop

The IMF describes a global economy in which the gap between economies is widening. In its words:

Currently, 32 economies generate 95% of global growth, compared with 54 economies in April, while downward revisions have become more frequent, affecting about 47% of economies.

The report names two forces, geopolitics and technology, that have begun to reshape the global economy, and says their long-term impact remains uncertain. It points to the conflict in the Middle East as the most recent and acute expression of geopolitical strain, with war and trade tensions creating negative supply shocks that pass through to energy prices and inflation. In the region, Poland is forecast to grow 3.4%, Bulgaria 2.6%, Hungary 1.9% and Czechia 1.8% in 2026, while the average for emerging and developing Europe is 1.7%.

The European Commission is due to publish its updated forecasts in November 2026. Its May report projected 0.1% growth for Romania in 2026.